Food industry faces ‘minefield’ over import plans

Earlier this week, chancellor of the Duchy of Lancaster Michael Gove revealed that the Government would be introducing import controls on EU goods at the border after the transition period ends on 31 December 2020.

This means traders in the EU and GB will have to submit customs declarations and be liable to goods checks. Gove also confirmed that the policy easements put in place for a potential no-deal exit would not be reintroduced, as businesses had time to prepare.

Gove said: “The UK will be outside the single market and outside the Customs Union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow​.”

Real Minefield ​

However, Clive Black, head of research at Shore Capital, said: “The reality is that this could be a real minefield for the food industry, albeit it will be a case that the devil will be in the detail​. 

“Food supply systems, particularly fresh food, are pretty well honed and anything that puts a spanner in the works is likely to be a real drag for everyone involved​.”

He added that any barriers and red tape were also likely to be “costly​” and could compress supply, leading to further food price inflation. He predicted there could also be adjustments in food sourcing, such as whether the UK continued to import as much perishable food from countries such as Denmark, Ireland, the Netherlands and Spain.

“So, the cards may be about to be thrown in the air. Let’s see how they land​,” he said.  

Infrastructure​

The British Retail Consortium (BRC) was equally concerned about the impact of the potential changes.

Andrew Opie, director of food and sustainability at the British Retail Consortium (BRC), said: “Without the necessary infrastructure up and running from day one, consumers in the UK will see significant disruption, particularly in the availability of fresh fruit and vegetables​.

“The Government needs to establish import and export processes, along with the necessary infrastructure capable of conducting checks on rules of origin, SPS ​[sanitary and phytosanitary requirements], VAT and more. Staff will need to be hired and trained to carry out these checks on the thousands of lorries that enter the UK every day. IT systems must be adapted and tested​.”

Meanwhile, Elizabeth de Jong, Freight Transport Association UK policy director said there needed to be more clarity for logistics operators.

“As representatives of the logistics industry, we are naturally disappointed that the promise of frictionless trade has been replaced with a  promise that trade will be as seamless as possible, but not until 2025, with a more realistic but costly ‘make do and mend’ approach to be employed until then. Industry will need the support of Government during this period to Keep Britain Trading effectively​,” she said.

This is not the first time that companies have expressed concern about Brexit as suppliers voiced concerns​ about Brexit's impact on exports, after admitting uncertainty had already hit trade. 

Last month, a new policy paper​ recommending common themes the Government should use to develop future trade policy was launched by a collaboration of food and drink organisations from across the supply chain.